Our basic approach to corporate governance is that in order to realize our basic management philosophy of continuously enhancing corporate value for all those who have an interest in our company, it is essential for us to improve the transparency and fairness of management by establishing a flexible organizational structure that meets the demands of the times and society, and by strengthening the compliance system, and the supervisory and check-and-balance functions for management. All executives and employees of the Teraoka Group are required to comply with and practice the “Teraoka Seisakusho Corporate Charter” and the “Teraoka Seisakusho Code of Conduct,” which are the highest norms of the Teraoka Group, formulated to earn the trust of society and to conduct business activities based on high ethical standards and social common sense.